Thirty Year Fixed Rate Mortgage (30F): The traditional 30F has a constant interest rate and monthly payments that never change. This may be a good choice if you plan to stay in your home for seven years or longer. If you plan to move within seven years, then adjustable rate loans are usually cheaper. As a rule of thumb, it may be harder to qualify for fixed rate loans than for adjustable rate loans. When interest rates are low, fixed rate loans are generally not that much more expensive than adjustable rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.

Also available as a 30F with the first 10 years Interest Only option: 40F with a first 10 year Interest Only option; 35F with the first 5 years Interest Only.

Fifteen-Year Fixed Rate Mortgage (15F): This loan is fully amortized over a 15 year period and features constant monthly payments. It offers all the advantages of the 30F, plus a lower interest rate and you'll own your home twice as fast. The disadvantage is that, with a 15F, you commit to a higher monthly payment. Many borrowers opt for a 30F loan and voluntarily make larger payments that will pay off their loan sooner. This approach is often safer than committing to a higher monthly payment, since the difference in interest rates isn't that great. (If you want to pay off your loan faster or build equity faster, please view my Homeownership Accelerator Presentation.)

Also available: 10F & 20F.

Adjustable Rate Mortgage (ARM): 3/1 ARM; 5/1 ARM; 7/1 ARM; 10/1 ARM; 3/6 ARM; 5/6 ARM; 7/6 ARM; 10/6 ARM These increasingly popular ARM's can offer the best of both worlds: lower interest rates with a fixed payment for a longer period of time than most adjustable rate loans. For example, a "5/1" has a fixed monthly payment and interest for the first five years and then recasts into a traditional adjustable rate loan that recasts every year for the remaining 25 years. A "5/6" is fixed for 5 years and then recasts every 6 months. They are both good choices for people who expect to move or refinance before or shortly after the adjustment occurs.

Also available: Interest Only option.

2/1 Buy Down Mortgage: The 2/1 Buy-Down Mortgage allows the borrower to qualify at below market rates so they can borrow more. The initial starting interest rate increases by 1% at the end of the first year and adjusts again by another 1% at the end of the second year. It then remains at a fixed interest rate for the remainder of the loan term. Borrowers often refinance at the end of the second year to obtain the best long-term rates. However, keeping the loan in place even for three full years or more will keep their average interest rate in line with the original market conditions.

Also available: Interest Only option.

One Month, Six Month & One Year ARM: This loan has a rate that is recasts once every period of the loan. Compared to other options, the rate is usually lower on these ARMs because the lender is only committing to a rate for a lower fixed time, so lender vulnerability is significantly reduced.

Also available: Interest Only option.